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Finance (Local Property Tax) Bill 2012: Committee Stage (Resumed) and Remaining Stages (Continued)

Tuesday, 18 December 2012

Dáil Éireann Debate
Vol. 787 No. 3

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(Speaker Continuing)

[Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty] They bought an apartment just to get on the property ladder, paying €450,000 for it. That couple cannot pay their mortgage and the two-bedroom apartment they live in is worth a fraction of the purchase price. Despite their not being able to pay their mortgage, it is planned to land another tax on them.

There is also a group of individuals who have had to adapt their houses. An individual living on an island off the coast of Donegal had the misfortune of having a family member in a serious accident. As the person wanted this family member at home, there was a need to expand the house and add a self-contained bedroom, changing room, etc. This has increased the market value of the house, although it came from a requirement to deal with the physical needs of a person. There are many cases like this where people have had to adapt a house to deal with such issues through no fault of their own, even if they did not wish to do so. As a result, the market value of such houses has been increased.

These constitute some of the most unfair elements in this legislation. The Minister knows I am completely opposed to the legislation and do not want to see it going through the House but I indicated on Second Stage that I would bring forward sensible amendments that would deal with some of the worst aspects of the Bill. The Minister has dismissed my comments and those of other Deputies but we will take that with a pinch of salt as he heaped praise on a party colleague who did not read the Bill. The Deputy in question called on the Minister to bring forward an easy payment mechanism despite it being contained in the Bill already. If the Deputy had read the Bill, he would have known about it.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae He was more concerned with mansions.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty He is the shining light as he called on the Minister to bring forward an easy payment system. He did not call on the Minister to consider the section deducting from farm payments or social welfare or the section dealing with the Revenue Commissioners' responsibilities. The Minister feels the Deputy in question is the shining light in here nonetheless.

Deputy Michael Healy-Rae: Information on Michael Healy-Rae Zoom on Michael Healy-Rae Perhaps he should be promoted.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty According to the Minister, we have not provided a pittance of information or analysis of issues that can be taken up. The Minister and the Government promised this legislation would be fair. The Bill has been discussed by the public for a long period but the Minister's arguments about resolutions are nonsense. The Minister knows the resolutions going through on the day of the budget are a separate matter and do not exist for eternity but only until the Finance Bill is enacted. The Minister is trying to play political games, which is a nonsense. This legislation does not have to go through tonight and can instead go through in January or February, leaving enough time to give people confidence about what is contained in it. We will not be able to deal with certain aspects of the Bill. The Minister has argued this is fair and promised as much but this must be a different type of fairness to what I believe in. I know the Minister's track record. I am a resident of a little parish in Gaoth Dobhair where the Minister's view of fairness hurt people many years ago, when he led the party of which he is now a member.

  The Minister's argument is that this tax is fair and progressive but it is not. He should not just take my word for this. We can consider what the ESRI has indicated in its analysis of the 2013 budget. The institute did a distributional impact analysis and released an interim report. Its findings arising from the Fine Gael and Labour budget were that the 20% with the lowest income has taken a hit of just over 1%, with the 20% with the highest income taking a hit of just over 0.5%. The lowest income group has seen twice the impact from the 2013 budget as the group with the highest income. That is not Sinn Féin spin from me; there are many findings from the ESRI with which I do not agree but these findings come from Tim Callan, Claire Keane, Michael Savage and John Walsh, researchers for the ESRI.

  The statistics go further and the paper indicates that property tax is a key factor in these results. It argues that for those with low incomes after housing costs, the emphasis is strongly on deferrals of property tax liability rather than income related exemptions or relief. This means the burden of the tax, deferred or otherwise, tends to be greatest on those with low incomes. That is the argument of the ESRI so despite the Minister's impassioned plea that this tax is fair - and mention of the mansion tax - it is clear that the measure is unfair and burdens those on low incomes. I am sure the Minister has read the ESRI report, which goes further by indicating that what will happen in 2014 will make it more unfair on those on the lowest incomes, as the full cost will come into play.

  The Minister claimed that I and others in the Opposition have spoken in a ridiculous fashion and that the idea of not taxing homes is simply ridiculous and has no standing. Has the Minister sat down with the Taoiseach, Deputy Kenny, and told him how ridiculous he was when he made such claims? Has he told Deputy Enda Kenny how ridiculous he sounded in 1994, before people were sucked into using mortgages to purchase houses at twice the cost of the current value? Before people paid massive stamp duty he made these claims. It is very easy for the Minister to stand up and claim that we are all ridiculous on this side of the House, and that it is ridiculous to speak of a notion of leaving property untaxed. The Minister argues that this will widen the tax base, through a fixed asset, and it is good for revenue and will help get the country going. Has the Minister sat down with the Taoiseach to discuss this?

  If he wishes to do so tomorrow, I will quote what he said. He stated:

It is morally unjust and unfair to tax a person's home and by doing so grind him into the ground. Indeed, in cases it could probably be unconstitutional. It reminds me of a vampire tax in that it drives a stake through the heart of home ownership, through enthusiasm and initiative, and sucks the life blood out of people who want to own their own home and better their position.

How ridiculous was Enda Kenny to stand in this Chamber and say that?

An Leas-Cheann Comhairle: Information on Michael Kitt Zoom on Michael Kitt It is a long-standing convention that we give Members their titles out of respect for the House.

Deputy Pearse Doherty: Information on Pearse Doherty Zoom on Pearse Doherty How ridiculous was An Taoiseach to stand in this House and parade in to introduce the vampire tax that will suck the lifeblood from home ownership? They are his words. It will grind people into the ground. He made those comments in 1994, when there was no issue of 170,000 people in mortgage distress. There were not hundreds of thousands of people in negative equity or 87,000 people emigrating every year from our shores. We did not have six successive austerity budgets that have ground people into the ground. Nevertheless, the Taoiseach, Deputy Kenny, made those comments in 1994.

It is easy and cheap of the Minister to dismiss our comments as rhetoric. There is an idea that we want the pain inflicted by the Government on ordinary people the length and breadth of this State to continue but we do not. We are talking about my families and friends. I went to Australia at the end of August at my own expense to meet people of the emigrant community. I have done the same in London, Glasgow and Boston; I am a child of parents who had to emigrate and I feel strongly about the issue. I spent a couple of days in Perth, where a support group has been set up with over 1,000 families. Some of them are getting on really well and others are not but all of them are quite hurt and angry. These are not young people with no ties but rather families with children who had to be taken from school or who will never go to school in this State. These people told how they have a property at home and are still paying a mortgage on it, knowing they will probably never set foot in the house again.

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